Friday, December 17, 2010

No Inflows

You would expect to see the retail investor start to put money back into mutual funds after such a strong rally but that has not been the case.  Unlike the money coming in to funds in  January and March/April, we've had net outflows in equity mutual funds over the past month, and ever since the market started rallying from the bottom in July.  This makes me hesistant to call a lasting top at the moment despite some very lopsided bullish sentiment data.

You rarely see lasting tops without the retail investor putting in money into mutual funds.  
I've got to see inflows into mutual funds for at least a few months before you can say that the retail investor is getting excited again.  We haven't seen that, but I am betting that we will next year if the rally continues.  Then we can start looking for that big top to short into. Until then, every short trade has to have a tight leash and a short time frame. 


Anonymous said...

Yo dawg i think you're fighting a losing battle. I think its time to switch to the dark side and buy dips. It doesn't look like we're going down much. The market broke the double top seasonality is bullish economy is recovering and we're on a path to 1400. Your minimum sat score to get into MIT. Just buy the fucking dip.

Anonymous said...

that being said i do expect us to pull back to 1200 near term but i bet this market will hold up. cover of usa today says "5 wall st heavyweights say its time to get back into stocks".

Market Owl said...

If we dip next week, I am out of my short but I can't buy a market like this, it can drop sharply without much warning.

Anonymous said...

With less volume next week, expect bigger swings in the indexes than prior weeks.
Remaining shorts could get squeezed.